What is IFRS?
IFRS stands for International Financial Reporting Standards, a set of standards promulgated by the International Accounting Standards Board (IASB), an international standard-setting body based in London. The IASB emphasises developing standards based on sound, clearly stated principles, from which interpretation is necessary (sometimes referred to as principles-based standards).
The Regulatory framework of IFRS
The key bodies in the regulatory framework of IFRS are the IFRS Foundation, the IASB, the IFRS Interpretations Committee, and the IFRS Advisory Council, as summarised below.
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The IFRS Foundation is a not-for-profit, private sector organisation operating independently. The primary role of the Foundation is to develop a single set of high-quality, understandable, enforceable and globally accepted international financial reporting standards (IFRSs) and promote and facilitate the adoption of IFRSs.
The International Accounting Standards Board (IASB) is the independent standard-setting body tasked with developing and issuing IFRSs and the IFRS for SMEs.
The IFRS Interpretations Committee (IFRIC) is the IASB's interpretative body. The Committee looks into issues relating to existing IFRS, such as matters that arise on their practical application, and produces interpretations known as IFRICs, often on specific and specialised issues.
The IFRS Advisory Council is not itself a standard-setting body. It provides advice to the trustees of the Foundation and the standard-setting bodies. It reflects the views of various interested parties, including academics, investor groups, auditors, professional bodies, analysts and preparers of financial statements. The trustees appoint the members.